Structural problems in the industry affect sales revenues and earnings in 2012
Sunways is to become a Technology Excellence Center and Inverter Competence Center for the LDK Group
Market entries in Canada, the USA and China planned for the next few years
The Sunways Group (SWW:GR, SWWG.DE, ISIN DE0007332207) believes it will again be able to generate operating profits from 2014 onwards. This improvement of the financial situation is to be achieved mainly through sales and cost synergies resulting from the intensified cooperation with the Chinese LDK Solar Group. Following the public takeover offer, LDK Solar Germany Holding GmbH is the new majority shareholder of the Konstanz-based photovoltaics manufacturer. „At present, we have to cope with individual but mostly also with industry-related structural problems. The pace of consolidation in the photovoltaics industry has accelerated significantly“, said Michael Wilhelm, CEO of Sunways, at the company’s general meeting held in Singen today. Wilhelm explained the reasons for the major losses incurred in the fiscal 2011 but also emphasized: „Due to the partnership with the LDK Solar Group, the prospects of the technology specialist Sunways are much better than they would be under a stand-alone strategy. In terms of operating profit, we plan to report black figures again in 2014.“
In the area of solar modules, Sunways intends to mainly build on its strong brand and service quality in the future cooperation with LDK Solar – to the advantage of both parties who so far serve different customer segments. With respect to solar cells, Sunways is to play a major role as a Technology Excellence Center within the LDK Solar Group. Basis for this will be the photovoltaics specialist’s extensive know-how relating to the development of high-efficiency silicon solar cells and a widespread network to internationally leading academic and research institutions in Germany, in particular in the Freiburg/Konstanz region. Finally, Sunways is to become Competence Center for solar inverters within the LDK Solar Group. Wilhelm, Chairman of the Management Board (CEO), sees a strong potential in this context. A joint market entry with LDK Solar is planned in Canada, the USA as well as in China. „Five years from now, Sunways and LDK Solar plan to be among the largest three manufacturers of solar inverters worldwide”, predicted Wilhelm.
The systematic development of new growth markets plays a key role for the Sunways Group. „In the future, volume growth in photovoltaics will increasingly be generated abroad, while holistic energy generation, storage and management systems will become more important in Germany“, he emphasized. Medium-term growth expectations mainly concentrate on the Chinese market. „The Chinese market can only be conquered together with an experienced local partner – whom we have found in LDK Solar“, said Wilhelm.
The past year was extremely difficult for the entire German solar industry. „This is also reflected in our financial statements“, explained Wilhelm. Consolidated sales revenues of Sunways AG decreased by about 50 percent to € 116.2 million. This was due to the declining demand in the company’s former core markets as well as to the dramatic deterioration of prices for components for photovoltaic systems, in particular solar modules. There was a negative operating result (EBIT) of € 66.1 million (2010: € +15.0 million).
Major non-recurrent and extraordinary expenses contributed to the losses incurred in the fiscal 2011: provisions for impending losses under wafer purchase contracts and various agreements with manufacturers relating to inverters, provisions for warranties and fixed asset impairments. In all, the operating result of Sunways AG for the fourth quarter of 2011 was affected by expenses of about € 44.0 million of which approx. € 34.0 million related to non-recurrent expenses. Thus the consolidated net loss for the full fiscal year amounted to € 62.1 million (2010: consolidated net income of € 9.3 million). A positive aspect was that the export quota of Sunways had grown in the past year. A total of 45.4 percent of consolidated sales were generated abroad (2010: 29.2 percent).
The Management Board’s prognosis for the current fiscal year is cautious. „In the fiscal year 2012, we want to stabilize the development of our sales volumes and revenues and reduce our losses as compared to 2011“, said Wilhelm. In view of the steadily changing political and economic framework conditions, the Management Board believes a more precise prognosis cannot be given at present.
At the Annual General Meeting, the shareholders approved all motions on the agenda. The following resolutions were passed:
The creation of new authorized capital and possible exclusion of the pre-emptive rights of shareholders as well as the amendment to paragraph 5, subparagraph 2 of the articles of incorporation were resolved. Bing Zhu, Chief Strategy Officer of the LDK Solar Group, was appointed to the three-member Supervisory Board as representative of the majority shareholder. The actions of the Management Board and Supervisory Board in the past fiscal year were formally approved and the audit company PricewaterhouseCoopers was again appointed as auditor.